Consultation on GIMB MSB Fees
Consultation on GIMB MSB Fees The Jersey Financial Services Commission (JFSC) invites comments on this Consultation Paper. Those who wish to do so, are invited to respond directly in writing to the JFSC.
The JFSC has also put in place arrangements with Jersey Finance for Jersey Finance to provide a coordinated response. Lisa Springate at Jersey Finance is co-ordinating this. Jersey Finance have asked us to advise those interested in pursuing this option, to provide comments to Jersey Finance by 18 December 2020.
Responses should be sent to:
Lisa Springate
Jersey Finance Limited
4th Floor
Sir Walter Raleigh House
48-50 Esplanade
St Helier
Jersey
JE2 3QB
Direct Line: +44 (0) 1534 836029
Office Line: +44 (0) 1534 836000
Email: lisa.springate@jerseyfinance.je
Alternatively, responses may be sent directly to the JFSC by 17 December 2020. If you require any assistance, clarification or wish to discuss any aspect of the proposals prior to formulating a response, it is of course appropriate to contact us.
The JFSC contact is:
Jon Stevens
Head of Policy
Jersey Financial Services Commission
PO Box 267
14-18 Castle Street
St Helier
Jersey
JE4 8TP
Direct Line:+44 (0) 1534 822085
Email:j.stevens@jerseyfsc.org
It is the policy of the JFSC to provide the content of responses for inspection unless specifically requested otherwise.
It is the policy of JFL (unless otherwise requested or agreed) to collate all responses and share them verbatim with the JFSC on an anonymised basis (with reference made only to the type of respondent, e.g. individual, law firm, trust company etc.) This collated, anonymised response will, typically, be placed in JFL’s permanent electronic archive which is currently open to all JFL members.
Glossary of terms
|
Commission/JFSC |
Jersey Financial Services Commission |
|
Commission Law |
Financial Services Commission (Jersey) Law 1998, as amended |
|
FSJL |
Financial Services (Jersey) Law 1998, as amended |
|
GIMB |
General Insurance Mediation Business |
|
MSB |
Money Service Business |
1 Consultation
1.1 Basis for consultation
1.1.1 The JFSC is issuing this consultation paper in accordance with Article 8(3) of the Commission Law, under which the JFSC “may, in connection with the carrying out of its functions […] consult and seek the advice of such persons or bodies whether inside or outside Jersey as it considers appropriate”.
1.1.2 In addition, Article 15(3) of the Commission Law, requires that before the JFSC introduce and publish any fee
“[The JFSC] must first publish a report that must include:
(a) details of the duty or power for or in respect of which the fee is to be determined;
(b) details of the proposed fee;
(ba)details of the extent (if any) to which any penalties received have reduced the level of fee that would otherwise have been proposed;
(c) a request for comments on the level of the proposed fee; and
(d) a date, that is at least 28 days after the publication of the report, before which those comments may be made to the Commission”.
1.1.3 Article 15(4) of the Commission Law provides that should the JFSC and a Representative Body be unable to agree a fee that we must request the Bailiff to appoint 3 Jurats to consider if the fee proposed is unreasonable.
1.1.4 The JFSC considers the Representative Bodies for the GIMB and MSB sectors to be those listed at Appendix A; that each of the proposals within this consultation is reasonable; and that this consultation constitutes such a report as required by the Commission Law.
1.2 Who will be affected by the proposed changes?
1.2.1 These amendments will affect all persons registered under the Financial Services (Jersey) Law 1998 (FSJL) to conduct general insurance mediation business (GIMB) and/or money service business (MSB) and persons that are issued with a registration certificate for such business on or after 1 January 2021.
1.3 Responding to the consultation
1.3.1 The JFSC invites comments from interested parties on the content of this consultation paper which should be received by either JFL, or by the JFSC, no later than 18 December 2020.
1.4 Next steps
1.4.1 Following this consultation, the JFSC will publish feedback. The final fees notice will take effect on or before 1 January. Firms will be notified when they need to use the myJFSC portal to collect their invoices.
2 The JFSC
2.1 Overview
2.1.1 The JFSC is a statutory body corporate established under the Commission Law. It is responsible for the supervision and development of financial services provided in or from within Jersey.
2.1.2 Article 15(2) of the Commission Law provides that fees set by the JFSC are to be retained and must, together with any other income:
2.1.2.1 Raise sufficient income to meet the JFSC’s liabilities;
2.1.2.2 Cover the JFSC’s expenses; and
2.1.2.3 Provide a reserve for the JFSC of such amount as it considers necessary.
2.2 The JFSC’s functions
2.2.1 Article 5 of the Commission Law prescribes that the JFSC shall be responsible for:
2.2.1.1 The supervision and development of financial services provided in or from within Jersey;
2.2.1.2 Providing the States, any Minister or any other public body with reports, advice, assistance and information in relation to any matter connected with financial services;
2.2.1.3 Preparing and submitting to the Minister recommendations for the introduction, amendment or replacement of legislation appertaining to financial services, companies and other forms of business structure;
2.2.1.4 Such functions in relation to financial services or such incidental or ancillary matters:
› As are required or authorised by or under any enactment, or
› As the States may, by Regulations, transfer; and
2.2.1.5 Such other functions as are conferred on the JFSC by any other Law or enactment.
2.3 Guiding principles
2.3.1 Article 7 of the Commission Law provides that in exercising its functions the JFSC may take into account any appropriate matter, but that the JFSC shall have particular regard to:
2.3.1.1 The reduction of the risk to the public of financial loss due to dishonesty, incompetence or malpractice by, or the financial unsoundness of, persons carrying on the business of financial services in or from within Jersey;
2.3.1.2 The protection and enhancement of the reputation and integrity of Jersey in commercial and financial matters;
2.3.1.3 The best economic interests of Jersey; and
2.3.1.4 The need to counter financial crime in both Jersey and elsewhere.
3 Proposals
3.1 Proposed fees
3.1.1 In order to raise sufficient income to meet the JFSC’s liabilities; cover its expenses; and to provide a reserve of such an amount as it considers necessary, the JFSC needs to raise approximately £150k in fees from the GIMB sector and approximately £23k from the MSB sector in 2021.
3.1.2 This budgeted income of approximately £173k does not represent an increase in the overall fees levied, but rather a stable amount in fee income compared to that raised in 2020.
3.1.3 The JFSC is closely monitoring and managing its costs in light of the current situation and, as detailed at 3.2, has carefully managed costs in respect of its MSB and GIMB supervision activities in recent years. While a robust focus on cost management and, where appropriate, reduction remains a priority for the JFSC, as for the businesses it supervises, the crucial work that the JFSC undertakes continues with minimal disruption and regulatory fees form a small part of the outgoings of the majority of regulated businesses.
3.1.4 The JFSC’s funding targets are designed to ensure that it can deliver on its Strategic Roadmap 2020-23. A critical component of its Strategic Roadmap is the JFSC’s contribution to the Island’s successes in the forthcoming MONEYVAL assessment as well as the need for the JFSC to deliver stretching goals in respect of demonstrating even more effective supervision, embedding risk-focused choices throughout its work and strengthening its organisational resilience.
3.1.5 As stated within all recent consultations in respect of other regulatory fees, any firms that are experiencing financial constraints as a result of the Covid-19 outbreak that mean they are unable to pay increased fees as they fall due are encouraged to contact their supervisors at the earliest opportunity.
3.1.6 No Civil Financial Penalties have been received that will reduce the fees payable by GIMBs or MSBs during 2021.
3.2 Supervisory effort and cost reduction
3.2.1 In line with the JFSC’s assessment of risk, MSBs and GIMBs generally receive pooled supervision, being subject to regular, yet less intense engagement than other regulated sectors. This is reflected in the generally lower quantum of GIMB and MSB fees by comparison to other regulated businesses.
3.2.2 Nevertheless, as the JFSC have focused efforts on financial crime supervision in the last two years the volume of GIMB and MSB supervisory activity has increased.
3.2.3 It is important to note that the JFSC have reduced the direct cost of its supervisory resource for all sectors in recent years, particularly at a senior level where it has carefully recruited when vacancies have arisen: overall reducing the costs of supervision.
3.3 Fees for alterations
3.3.1 There is a reasonable volume of activity where registered persons request changes in respect of their names and in respect of adding, amending, or removing licence conditions. These alterations do not currently incur a fee, however, do require supervisory effort in appraising the request, then determining and documenting the outcome.
3.3.2 It is proposed that a fee of £400 shall be paid by a registered person who applies for an alteration so as to reflect all or any of the following:
3.3.2.1 a change of the name of the registered person;
3.3.2.2 the addition, alteration or removal of conditions pursuant to an application from the registered person.
3.4 Question regarding 3.3
|
3.4.1 Do you agree with the proposed fee in respect of alterations? |
4 GIMB fee proposals
4.1 Proposed changes to fee rates
4.1.1 We propose to increase GIMB fee rates by 0.9%, being the most recently published Jersey RPI, rounded to the nearest £5.
4.1.2 The draft fees notice reflecting the proposals can be found in Appendix B.
4.1.3 Because of changes in licensees and their business levels, we may end up collecting more or less than our budgeted level of fee income of approximately £150k for 2021.
4.2 Question
|
4.2.1 Do you agree with the proposals relating to GIMBs? |
5 MSB fee proposals
5.1 Proposed changes to fee rates
5.1.1 We propose to increase GIMB fee rates by 0.9%, being the most recently published Jersey RPI, rounded to the nearest £5.
5.1.2 The draft fees notice reflecting the proposals can be found in Appendix C.
5.1.3 Because of changes in licensees, we may end up collecting more or less than our budgeted level of fee income of approximately £23k for 2021.
5.2 Question
|
5.2.1 Do you agree with the proposals relating to MSBs? |
Appendix A - list of representative bodies who have been sent this consultation paper
› Chartered Insurance Institute, Jersey branch
› Jersey Finance
› Jersey International Insurance Association
Appendix B – Draft GIMB fees notice
Notice of Fees
Published in accordance with:Article 15 of the Financial Services Commission (Jersey) Law 1998, as amended
Payable by or in relation to:General Insurance Mediation Business
Pursuant to:Articles 8(3) and 9(6) of the Financial Services (Jersey) Law 1998, as amended; and
Article 15(6) of the Financial Services Commission (Jersey) Law 1998, as amended
Commencement date:The fees set out in this notice and the attached schedule are effective for the period from 1 January – 31 December 2021
1.1 In this notice, unless the context otherwise requires –
|
Brokerage income |
means: (a) in relation to a registered person who carries on general insurance mediation business activities from within Jersey, means the net retained brokerage and other income arising from such activities whether the brokerage or income arises within or outside Jersey; and (b) in relation to a registered person who carries on general insurance mediation business activities in Jersey from outside Jersey, means the net retained brokerage and other income arising from such activities in Jersey by the registered person; |
|
JFSC |
means the Jersey Financial Services Commission; |
|
Law |
means the Financial Services (Jersey) Law 1998, as amended; |
2.1 For the purposes of Article 8(3)(c) of the Law (which Article allows fees that are to accompany applications for registration to be published), the fee specified in an entry in column 3 of Schedule 1 is prescribed in respect of applications for registration in relation to the class of general insurance mediation business specified in the entry opposite in column 2 of the Schedule.
3.1 For the purposes of Article 9(6) of the Law (which Article allows fees payable by registered persons to be published):
(a) a person within class S of Table 1, Schedule 2, shall pay for each year of registration (other than the year in which the person is first so registered) the annual fee set out opposite that class in column 4 of Table 1, Schedule 2; and
(b) a person:
(i) who is within class P, Q or R of Table 1, Schedule 2; and
(ii) whose brokerage income for the accounting year that ended in the year before the registration year for which the fee is payable is within a range specified opposite that class in column 3 of Table 1, Schedule 2,
shall pay, for each year of registration (other than the year in which the person is first so registered) the annual fee set out in column 4 of Table 1, Schedule 2.
(c) a person:
(i) who is within class P, Q, R or S specified in Schedule 1, as determined in accordance with column 2 of that Schedule, and
(ii) who is within the description of general insurance mediation business in column 1 of Table 2, Schedule 2,
shall pay for each year of registration (other than the year in which the person is first so registered) the annual fee set out in column 2 of Table 2, Schedule 2.
4 Late payment of fees and/or late submission of fees information
4.1 The due date for the JFSC to receive the annual fee is 29 February.
4.2 If the annual fee is not received by the JFSC by the due date, an additional late payment fee of 5% of the unpaid principal amount will be applied on the day after the due date, and on the 1st day of each calendar month after that.
4.3 If the firm does not supply the required information to calculate its registration fee by the due date, an administration fee of £200 will be charged the day after the due date, and on the 1st day of each calendar month after that while the information is still outstanding. This is in addition to the late payment fee set out in paragraph 4.2 which will be calculated once the information has been submitted.
5.1 If a registered person fails to file or deliver any document, including in respect of supervisory risk data, to the JFSC under the provisions of the Law or under any provisions of any Order issued in accordance with the Law on or before the date that the document becomes due, the registered person shall be liable to pay a fee of £100 for each complete month or part thereof that the document remains un-filed or undelivered unless the registered person has given the JFSC prior written notice of the reasons for the late filing or delivery of a document and the JFSC has agreed in writing that the filing may be late. Any such later agreed date shall become the due date for the purposes of the calculation and the payment of late filing fees.
Schedule 1: Prescribed classes and application fees
|
Column 1 |
Column 2 |
Column 3 |
|
Class reference |
Description of class of business |
Application fee |
|
P |
Carrying on general insurance mediation business (other than incidental general insurance mediation business), not carrying on any other class of financial service business and not being a business that is within Class Q. |
£6,625 |
|
Q |
Carrying on general insurance mediation business (including incidental general insurance mediation business): (a) in addition to carrying on: (i) any class of financial service business other than general insurance mediation business; or (ii) any other business authorized under the Banking Business (Jersey) Law 1991, the Collective Investment Funds (Jersey) Law 1988 or the Insurance Business (Jersey) Law 1996; or (b) as a company that is part of a group, where another part of the group carries on: (i) any class of financial service business other than general insurance mediation business; or (ii) any other business authorized under the Banking Business (Jersey) Law 1991, the Collective Investment Funds (Jersey) Law 1988 or the Insurance Business (Jersey) Law 1996. |
£3,315 |
|
R |
Carrying on incidental general insurance mediation business, if: (a) the business includes the giving of advice on the terms, conditions or suitability of the policy being proposed; and (b) the business to which the general insurance mediation business is incidental: (i) is not within a class of financial service business, and (ii) is not business authorized under the Banking Business (Jersey) Law 1991, the Collective Investment Funds (Jersey) Law 1988 or the Insurance Business (Jersey) Law 1996. |
£3,315 |
|
Column 1 |
Column 2 |
Column 3 |
|
Class reference |
Description of class of business |
Application fee |
|
S |
Carrying on incidental general insurance mediation business, if: (a) the business does not include the giving of advice on the terms, conditions or suitability of the policy being proposed; and (b) the business to which the general insurance mediation business is incidental: (i) is not within a class of financial service business, and (ii) is not business authorized under the Banking Business (Jersey) Law 1991, the Collective Investment Funds (Jersey) Law 1988 or the Insurance Business (Jersey) Law 1996. |
£110 |
Schedule 2: Annual Fees (Table 1)
|
Column 1 |
Column 2 |
|
Column 3 |
|
Class |
Description |
|
Annual fee |
|
P |
A person who is within Class P as determined in accordance with Schedule 1 and who is not a person within Table 2. |
(a) £0 to £49,999,999 |
£2,040 |
|
(b) £50,000 to £99,999 |
£3,350 |
||
|
(c) £100,000 to £499,999 |
£4,475 |
||
|
(d) £500,000 to £999,999 |
£5,590 |
||
|
(e) £1,000,000 to £2,499,999 |
£6,710 |
||
|
(f) £2,500,000 to £4,999,999 |
£8,950 |
||
|
(g) £5,000,000 or more |
£11,180 |
||
|
Q |
A person who is within Class Q as determined in accordance with Schedule 1 and who is not a person within Table 2. |
(a) £0 to £49,999 |
£1,020 |
|
(b) £50,000 to £99,999 |
£1,695 |
||
|
(c) £100,000 to £499,999 |
£2,240 |
||
|
(d) £500,000 to £999,999 |
£2,815 |
||
|
(e) £1,000,000 to £2,499,999 |
£3,350 |
||
|
(f) £2,500,000 to £4,999,999 |
£4,475 |
||
|
(g) £5,000,000 or more |
£5,590 |
||
|
R |
A person who is within Class R as determined in accordance with Schedule 1 and who is not a person within Table 2. |
(a) £0 to £49,999 |
£530 |
|
(b) £50,000 to £99,999 |
£870 |
||
|
(c) £100,000 to £499,999 |
£1,120 |
||
|
(d) £500,000 to £999,999 |
£1,415 |
||
|
(e) £1,000,000 to £2,499,999 |
£1,695 |
||
|
(f) £2,500,000 to £4,999,999 |
£2,240 |
||
|
(g) £5,000,000 or more |
£2,815 |
||
|
S |
A person who is within Class S as determined in accordance with Schedule 1 and who is not a person within Table 2. |
£70 |
Schedule 2: Annual Fees (Table 2)
|
Column 1 |
Column 2 |
|
Description |
Annual Fee |
|
A person who: (a) has a place of business in Jersey from which the person carries on general insurance mediation business in or from within Jersey; or (b) is a company incorporated in Jersey, and who: (c) is within Class P, Q, R or S as determined in accordance with Schedule 1, and (d) is exempted, under an Order made under Article 17 (see (i) below) or Article 20 (see (ii) below) of the Law in relation to general insurance mediation business, from the application of that Order (see (iii) below). |
£70 |
(i) Where Article 17 of the Law relates to the Financial Services (General Insurance Mediation Business (Accounts, Audits, Reports and Solvency)) (Jersey) Order 2005.
(ii) Where Article 20 of the Law relates to the Financial Services (General Insurance Mediation Business (Client Assets)) (Jersey) Order 2005.
(iii) Where an exemption under one or other of the General Insurance Mediation Business Orders has been granted by the Commission on the basis that the registered person is an appropriately regulated person in respect of general insurance mediation business in accordance with the criteria set out under:
1. Article 21(3) of the Financial Services (General Insurance Mediation Business (Accounts, Audits, Reports and Solvency)) (Jersey) Order 2005; and/or
2. Article 20(3) of the Financial Services (General Insurance Mediation Business (Client Assets)) (Jersey) Order 2005.
Appendix C – Draft MSB fees notice
Notice of Fees
Published in accordance with:Article 15 of the Financial Services Commission (Jersey) Law 1998, as amended
Payable by or in relation to:Money Service Business
Pursuant to:Articles 8(3) and 9(6) of the Financial Services (Jersey) Law 1998, as amended; and
Article 15(6) of the Financial Services Commission (Jersey) Law 1998, as amended
Commencement date:The fees set out in this notice and the attached schedule are effective for the period from 1 January – 31 December 2021
1.1 In this notice, unless the context otherwise requires –
|
JFSC |
means the Jersey Financial Services Commission; |
|
Law |
means the Financial Services (Jersey) Law 1998, as amended; |
2.1 The fee to accompany an application for registration to carry on money service business shall be £2,865.
3.1 A person registered to carry on money service business at any point during the calendar year shall pay a fee of £2,865.
4.1 The due date for the JFSC to receive the annual fee is: 29 February, if the firm is already registered on 1 January; and otherwise on registration.
4.2 If the annual fee is not received by the JFSC by the due date, an additional late payment fee of 5% of the unpaid principal amount will be applied on the day after the due date, and on the 1st day of each calendar month after that.
5.1 If a registered person fails to file or deliver any document, including in respect of supervisory risk data, to the JFSC under the provisions of the Law or under any provisions of any Order issued in accordance with the Law on or before the date that the document becomes due, the registered person shall be liable to pay a fee of £100 for each complete month or part thereof that the document remains un-filed or undelivered unless the registered person has given the JFSC prior written notice of the reasons for the late filing or delivery of a document and the JFSC has agreed in writing that the filing may be late. Any such later agreed date shall become the due date for the purposes of the calculation and the payment of late filing fees.